End of Day Summary – 4/29/2025

US Treasuries

Bloomberg: Simon White:

A reminder that just because US yields are off their recent highs, the US’s huge interest bill on its debt has not gone away.

Not only has it not gone away, the fact yields are still on net higher than they were last year means a further rise in the bill is baked in the cake (see chart).

The interest bill is already at $1.2 trillion, 4% of GDP or, remarkably, almost 20% of tax revenues. The CBO expects that to rise to the point that $1 in every $4 of tax revenue is going purely to pay coupons to bond holders.
That means it will be difficult to reduce the fiscal deficit, with increasing amounts new debt issued solely to pay interest .

The US cannot afford higher yields. That’s not to say it won’t happen though, prompting, perhaps, more QE or yield curve control at some point, and/or financial repression, coercing domestic capital into the Treasury market.

Bloomberg: Office Loan Trouble Signal Problems Ahead for a $650 Billion Bond Market 

When three Seattle office buildings a short distance from Amazon.com Inc.’s headquarters defaulted on $135 million worth of commercial mortgage debt last month, it left bond investors who financed the properties facing a long and uncertain slog to claw back money.

Upcoming US Treasury Supply

The table below shows the contributions to the Atlanta Fed’s gold-adjusted GDPNow measure. The yellow highlighted section notes net exports took a 4.05% bite out of gold-adjusted GDPNow.

• Is this really the end of US exceptionalism?
• Other than a few days, are US markets trading like emerging markets?
• Is this really the end of the dollar dominance?

In Other News… 

OilPrice: Aluminum Premiums Surge After New Tariffs Imposed 

New US tariffs on aluminum imports have caused a sharp increase in prices, leading to record highs for domestic aluminum and impacting various industries that rely on the metal.

Bloomberg: Funding Market Strains Return in Month Rocked by Tariff Unease

Rates in the US funding market have been climbing as April ends, flashing a sign that liquidity constraints are building in the plumbing that underlies the world’s biggest financial system.

Sal Mercogliano (WGOW Shipping) on X: 

Arbor Data Science: Supply Chain Disruptions on the Horizon?

RedFin News: The Typical Home Seller Wants $39,000 More Than the Typical Buyer is Willing to Pay 

The $469,729 median asking price is 9% higher than the $431,057 median sale price—the largest gap since 2020.

Cox Automotive: Auto Market Report: April 29

Average auto loan rates have moved lower, providing some relief to consumers.

• Auto rates moved higher to start 2025 but declined in March and so far in April to 9.38% for new and 14.22% for used.